BHSI’s Breuil: ‘Data and analytics indissociable from underwriting’
September 23 2021 by Andrew Tjaardstra
InsuranceAsia News (IAN) recently caught up with Marc Breuil, regional president Asia Middle East – Berkshire Hathaway Specialty Insurance (BHSI).
Among the topics discussed were the global firm’s regional growth plans and how the specialist (re)insurance market is developing — including the use of data and analytics in underwriting. Breuil is based in the company’s regional hub in Quarry Bay, Hong Kong.
IAN: How has 2021 been for BHSI in Asia so far and how what is your outlook for the rest of the year and into Q1 2022 ?
Breuil: In spite of the ongoing challenges brought about by Covid-19, BHSI in Asia has continued to show double-digit growth in 2021 which marked our seventh year of operation in both Hong Kong and Singapore. With around 130 team mates across five offices in the Asia Middle East region, we continue to expand rapidly into 2022. BHSI Dubai, in particular, is experiencing strong growth even though it only started operations in 2018. In another telling sign of our regional expansion, BHSI Hong Kong became the largest employee compensation carrier last year.
IAN: Which product areas are you seeing the most growth in and in which areas are you investing?
Breuil: The backdrop until Q2 2021 was that of a hardening of rates across Asia and the Middle East particularly in specialty lines with global exposure or with catastrophe exposure or programs with adverse loss histories. Capacity though has remained available for most placements, except at times for executive and professional lines — which have seen the fastest growth both in Asia and in the Middle East.
BHSI has also made a meaningful investment into its transactional and tax liability practice since 2019 – recruiting externally and grooming internal talents under Steven Harwood’s leadership. Consequently, our transactional liability practice has seen tremendous growth this year, driven not only by a resurgence of mergers & acquisition activities but also by a much greater percentage of the transactions getting insured in the region. Finally, we continue to see pockets of opportunities in property, energy and construction, particularly for complex risks in cat-exposed territories.
IAN: How is data and analytics improving and helping the specialist Asia (re)insurance market?
Breuil: Data and analytics play a key role in BHSI’s underwriting approach. Be it on the actuarial side to price our exposure accurately or on the cat analytics side to assess severity exposures such as natural catastrophes — data and analytics have been indissociable from underwriting. They are even more essential to BHSI as an ultimate risk-bearing carrier, unlike other carriers whose capacity may be constrained by treaty restrictions.
The multiple cat events which have hit the region since the great Tohoku Earthquake of 2011 and the 2018 and 2019 typhoons — including Typhoon Mangkhut, Typhoon Jebi and Typhoon Hato — brought greater awareness of the adequacy of cat pricing in the region – or lack thereof. BHSI’s approach stands out as we continue to leverage our own global cat modelling capabilities which not only allows us to bring to our customers greater precision than commercial models but also to roll-out innovative products such as parametric insurance.
IAN: What do you think are some of the key trends that are set to help shape the specialist (re)insurance market in the region over the next couple of years?
Breuil: There are two major trends affecting the specialist reinsurance market. Firstly, the expansion of more traditional and retail-focused carriers into the specialty insurance and reinsurance market – including internationally. Second is a drive towards more consolidation among both brokers and carriers as players continue to seek efficiency and scale.
Additionally, growth-focused strategies that once justified the more accommodating underwriting approach adopted by multiple carriers in the region, have been muted by the pandemic and replaced by more stringent underwriting discipline. However, the real question remains how long will such discipline last. As markets mature in the region, customers show increasing interest for new risk transfer solutions such as parametric insurance or medical stop loss in the employee benefits insurance sector. Those solutions will at times turn out to be simpler, more practical, and more adapted to some of our customers’ needs.
-
Q&A: Global warming is creating uncertainty in valuation of physical assets
- September 26
Chelsea Jiang, Axa’s chief technical and innovation officer, general insurance for Greater China, shares her views on parametric, how companies can guard against convective storms, and HK’s role in narrowing China’s protection gap.
-
Q&A: Gallagher Re’s Mark Morley on renewals, inflation and pricing
- November 3
The Singapore-based APAC managing director shares his views.
-
Q&A: Swiss Re’s Mark Senkevics
- April 6
Head of P&C underwriting for Asia and ANZ on extreme flooding events in Asia, and how these can be managed going forwards.
-
Q&A: Hong Kong CIB’s chairman Alex Yip
- February 17
The broking association is prioritising professionalism and communication.
-
BHSI | Managing non-Asian exposure in long-tail lines
While US-exposed business can look attractive to Asian carriers, managing the volatility around the long-term results and the ability to model those losses are crucial, say BHSI’s Marc Breuil and Marcus Portbury.
-
Sedgwick | To Handle CAT Claims Well, Multi-Step Preparation is Key
When it comes to risk, it’s not a matter of “if” it’s a matter of “when” an event will occur.
-
HSBC Asset Management | Is it time to relook at Asian currency bonds?
With diversification and performance high on investors’ agendas, it seems a good time for global portfolios to revive allocations in Asian local currency bonds – including Hong Kong dollar (HKD) bonds.
-
PineBridge Investments | Why Asian insurers are exploring private credit and CLOs
The recent rollout of risk-based capital regimes across Asia calls for a closer alignment between insurers’ assets and liabilities. We explore potential ways to maintain a healthy investment yield and robust returns on regulatory capital.
